Former Chimei Innolux president says Foxconn’s Sharp deal is for iTV

By , Jun 29, 2012

According to a former executive from Taiwanese supply chain, Foxconn’s recent investments into the Japanese electronics giant Sharp and its cutting-edge display factory is in fact part of preparations for a large-scale manufacturing of a rumored Apple television set, dubbed by the media the iTV…

DigiTimes, an Asian trade publication, has the story:

Foxconn Electronics’ investment in Sharp is aimed at securing iTV orders from Apple, which will be a positive development for the flat panel industry if the strategy works, according to Ho Chao-yang, former president of Chimei Innolux (CMI) and current chairman of Chi Mei Materials Technology.

Chimei Innolux is a Foxconn affiliate and an Apple supplier.

Regardless of DigiTimes’ sketchy track record, there’s no escaping the fact that Foxconn’s recent moves are pretty indicative in light of iTV whispers.

Here’s a brief timeline of key events:

1. Last August, a rumor surfaced that Apple wanted to invest one billion dollars in Sharp’s Kameyama plant “to secure stable supply of screens for iPhones and iPads”.

2. In late-March, Foxconn and Sharp announce a strategic global manufacturing partnership that will see the former acquire an eleven percent stake in Sharp. The deal is worth $844 million and includes a 46.5 percent stake in Sharp’s LCD plant in Osaka, Japan.

3. Early-April, Forbes picks up a story from a Chinese website (later taken down) that Apple was contemplating investing an astounding $9.76 billion in its favorite contract manufacturer Foxconn.

4. In May, English-language daily newspaper China Daily cited Foxconn CEO Terry Gou as saying that his company was “making preparations for iTV”, though noting that development or manufacturing had not commenced yet.

5. A day later, AppleInsider reports that Apple was looking to buy German TV maker Loewe AG for about $112 million.

6. The following day, Loewe officials issue a denial as there being “absolutely nothing” to AppleInsider’s report.

7. 24 hours later, Foxconn’s PR shot down the China Daily story, saying in an ambiguous statement that its CEO “neither confirmed nor speculated about Foxconn’s involvement”in the project, but nonetheless stressing that the world’s largest assembler of gadgets is “always prepared to meet the manufacturing needs of customers”.

8. On May 24, Reuters cited a report by Japanese daily NikkeiSharp which claimed Sharp would share its technological know-how with Foxconn’s new manufacturing facility in Chengdu on display panels for the iPhone and “other consumer electronics devices”.

9. On June 18, Foxconn tells Reutersthat Foxconn was engaged in talks with Sharp about increasing its stake. A quote attributed to Foxconn’s boss indicates that Foxconn wants to “beat Samsung in terms of clearness – high resolution”. Gou also told the news gathering organization that he paid for a 46.48 percent stake in Sharp’s Sakai plant out of his own pocket, underscoring the plant has an exclusive agreement with Corning on large panel supply “so our competitors won’t be able to secure any glass even if they want it”.

10. Nine days ago, Chinese news site 21cbh.com reports that “Foxconn originally expected to begin receiving LCD TV panels for an Apple television in the fourth quarter of this year, but that scheduled arrival from Sharp has apparently been moved up”.

Sharp is on Apple’s list of supply chain partners. The company has reportedly produced a small run of Retina display panels for the new iPad and is planning to ramp up production in the second quarter of this year.

All of this could mean nothing, but it could also mean a lot of things.

For all we know, Foxconn’s motivation here could be to challenge its arc-rival Samsung’s display making business. After all, Gou makes it abundantly clear how he has made it a lifetime goal to defeat Samsung, confidently telling shareholders recently that the next iPhone would put Samsung’s Galaxy S III to shame.

That being said, I have a  think we’re reaching a point where there are too much coincidences to dismiss the iTV assertion, don’t you think?

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